The rating agency Standard & Poor's downgraded Italy's rating from BBB+ to BBB, with a negative outlook. The rating agency's decision reflects the prospect of a further deterioration of the Italian economy in a decade in which average real growth has been below 0,04%. The GDP forecasts for 2013 were also lowered, to -1,9% (from -1,4%). The debt-to-GDP ratio is seen at 129% at the end of the year.
According to S&P Italy's low growth derives in large part from rigidity in the labor and production markets, labor costs are higher than in any other EU country. Perennial problems, which must find a strong and shared political solution and which, according to the American agency, have not yet even been taken into consideration. The outlook is negative, with a 33% chance of lowering it again in 2013 or 2014.
In addition to the well-known economic factors, it weighs on the judgment of the rating agency the risk of compliance with budget constraints. In the official statement, S&P has some doubts about the ability of the shaky coalition to know how to find the resources necessary to compensate for the postponement or remodulation of the property tax (IMU) and the increase in VAT (elements of contrast between the coalition parties: PD and PdL).
With this cut made by the agency, our country is only two steps above the level of "junk"i.e. garbage.
What would be the consequences? It would be a big problem for Italy, given that its government bonds (remember that we are the fourth nation in the world in terms of bond market, in terms of weight, strength and emissions) would automatically be discarded from all those funds, local and otherwise, which do not they can hold "junk" securities in their portfolio, due to an obligation imposed by the authorities on the managers. The repercussions would be heavy. It is hoped that this downgrading, which the Treasury has defined as "with retrospective and unacceptable reasons", will consolidate the conviction within the Letta Government to implement real and fearless reforms, not because they are suggested by S&P and the IMF, but more generally common sense.
